Enterprise operations management Handbook steve blanding

ANN S.ANGEL, President, Technologies Training of the Triad, Inc., Winston-Salem and Greensboro, NC JOE AUER, Founder and President, International Computer Negotiations, Inc., Winter Pa

HANDBOOK 2ND EDITION

A Standard for Auditing Computer Applications, Martin Krist, ISBN: 0-8493-9983-1 Analyzing Business Information Systems, Shouhong Wang, ISBN: 0-8493-9240-3 Broadband Networking, James Trulove, Editor, ISBN: 0-8493-9821-5

Communications Systems Management Handbook, 6th Edition, Anura Gurugé and

Lisa M.Lindgren, Editors, 0-8493-9826-6

Computer Telephony Integration, William Yarberry, Jr., ISBN: 0-8493-9995-5 Data Management Handbook, 3rd Edition, Sanjiv Purba, Editor, ISBN: 0-8493-9832-0

Electronic Messaging, Nancy Cox, Editor, ISBN: 0-8493-9825-8

Enterprise Systems Architectures, Andersen Consulting, 0-8493-9836-3 Enterprise Systems Integration, John Wyzalek, Editor, ISBN: 0-8493-9837-1 Healthcare Information Systems, Phillip L.Davidson, Editor, ISBN: 0-8493-9963-7 Information Security Architecture, Jan Killmeyer, ISBN: 0-8493-9988-2 Information Security Management Handbook, 4th Edition, Harold F.Tipton and

Micki Krause, Editors, ISBN: 0-8493-9829-0

IS Management Handbook, 7th Edition, Carol V.Brown, Editor, ISBN: 0-8493-9820-7 Information Technology Control and Audit, Frederick Gallegos, Sandra Allen-Senft,

and Daniel P.Manson, ISBN: 0-8493-9994-7

Internet Management, Jessica Keyes, Editor, ISBN: 0-8493-9987-4

Local Area Network Handbook, 6th Edition, John P.Slone, Editor, ISBN:

0-8493-9838-X

Multi-Operating System Networking: Living with UNIX, NetWare, and NT, Raj

Rajagopal, Editor, ISBN: 0-8493-9831-2

Network Manager’s Handbook, 3rd Edition, John Lusa, Editor, ISBN: 0-8493-9841-X

Project Management, Paul C.Tinnirello, Editor, ISBN: 0-8493-9998-X

Systems Development Handbook, 4th Edition, Paul C.Tinnirello, Editor, ISBN:

Enterprise Operations Management HANDBOOK

(alk paper) 1 Information Technology—Management 2 Client/server computer—Management

3 Business enterprises—Computer networks— Management 4 Electronic data processing departments—Management I Blanding, Steven F HD30.2.H364 1999 658′.05–dc21 99–39628

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Library of Congress Card Number 99-39628

ANN S.ANGEL, President, Technologies Training of the Triad, Inc., Winston-Salem and

Greensboro, NC

JOE AUER, Founder and President, International Computer Negotiations, Inc., Winter

Park, FL

C.WARREN AXELROD, Senior Vice President, Corporate Information Systems,

Carroll McEntee & McGinley, Inc., New York, NY

LAYNE C.BRADLEY, Vice President, Technology Management Group, Computer

Sciences Corporation, Fort Worth, TX

CHARLES V.BREAKFIELD, Senior Engineer, Symposium Professional Services,

Nortel, Dallas, TX

JOE R.BRIONES, Manager of Computer Services, Computer Sciences Corporation, Ft

Worth, TX

THOMAS A.BROWDY, Director, Center for the Application of Information

Technology, Washington University, St Louis, MO

ROXANNE BURKEY, Senior Consultant Designer, Symposium Professional Services,

Nortel, Dallas, TX

VISHAL DESAI, President, Savli Group, Silver Spring, MD

EDWARD S.DEVLIN, Independent Consultant, Westchester, PA

S.ANN EARON, Director, Telemanagement Resources International, Inc., Skillman, NJ COLE H.EMERSON, President, Cole Emerson & Associates, Fair Oaks, CA

JOHN FISKE, Independent Writer, Prides Crossing, PA

MICHAEL L.GIBSON, Professor of Management, Auburn University, Auburn, AL CARL STEPHEN GUYNES, Professor, College of Business Administration, University

of North Texas, Denton, TX

RON HALE, Senior Manager, Deloitte & Touche LLP, Chicago, IL

IAN S.HAYES, Principal, Clarity Consulting, Salem, MA

ROBERT L.HECKMAN, Assistant Professor, School of Information Studies, Syracuse

University, Syracuse, NY

GILBERT HELD, Director, 4-Degree Consulting, Macon, GA

LUKE HOHMANN, Vice President of Engineering, SmartPatents, Inc., Mountain View,

CA

KEITH A.JONES, Certified Quality Analyst and Senior Data Services Consultant, Dun

& Bradstreet, Palm Harbor, FL

LEON A.KAPPELMAN, Department of Business Computer Information Systems,

University of North Texas, Denton, TX

RANDY KECK, Technology Manager, Operations Control Systems, Palo Alto, CA CAROL L.LARSON, Freelance Desktop Publisher, Beaverton, OR

JAMES A.LARSON, Senior Software Engineer, Intel Architecture Lab, Hillsboro, OR

MARTIN F.MEDEIROS II, Manager, Technology Procurement, United States Fidelity

and Guarantee Co., Baltimore, MD

STEWART S.MILLER, President and Owner, Executive Information Services,

Carlsbad, CA

NANCY BLUMENSTALK MINGUS, President, Mingus Associates, Inc., Williamsville,

NY

NATHAN J.MULLER, Independent Consultant, Huntsville, AL

WILLIAM HUGH MURRAY, Executive Consultant, Information Systems Security,

Deloitte & Touche, New Canaan, CT

JEFF MURRELL, Manager, Enterprise Computing Operations, Information Systems and

Services Division, Texas Instruments, Inc., Plano, TX

KATE NASSER, President, CAS, Inc., Somerville, NJ

PAUL NISENBAUM, Software Engineer, Candle Corp., Santa Monica, CA

RAJ RAJAGOPAL, Principal Scientist, MITRE Corp., McLean, VA

CHRIS ROOKE, Director of Product Marketing, Tandem Computers, Inc., Cupertino,

CA

SALVATORE SALAMONE, News Editor, Byte Magazine, New York, NY

TARI SCHREIDER, Director of Research, Contingency Planning Research, Inc., White

Plains, NY

GREG SCILEPPI, Executive Director, RHI Consulting, Menlo Park, CA

DUANE E.SHARP, President, SharpTech Associates, Mississauga, Ontario, Canada ROBERT E.UMBAUGH, Principal, Carlisle Consulting, Carlisle, PA

MICHAEL E.WHITMAN, Assistant Professor, Department of Computer Science and

Information Systems, Kennesaw State University, Kennesaw, GA

STEVEN M.WILLIFORD, President, Franklin Services Group, Inc., Columbus, OH JOHN WINDSOR, Interim Chairman, IS Department, University of North Texas,

Denton, TX

LEO A.WROBEL, JR., President and Chief Executive Officer, Premiere Network

Services, Inc., DeSoto, TX

3 Developing People Skills: A New I/T Priority Greg Scileppi 32

4 Professional Consulting: The Analysis Methodology Charles V.Breakfield and Roxanne E.Burkey 39

5 Pricing Methods Across Linked Networks Keith A.Jones 51

6 Enterprise Modeling for Strategic Support Michael E.Whitman and Michael L.Gibson 59

7 Reverting to Centralized Data Center Management C.Warren Axelrod 75

8 Acquiring and Using a UPS System Gilbert Held 84

9 Providing Quality Information Services to the Customer Joe R.Briones 91

10 Evaluating a Job Scheduler in the Open Systems Arena Randy Keck 101

11 Help Desk Technology Nathan J.Muller 111

12 Call Center Computer Telephony Integration: A Case Study Charles V.Breakfield and Roxanne E.Burkey 118

13 Maintaining Data in Mainframe and Network Environments Roxanne E.Burkey 129

14 Managing Data Storage and Distribution Roxanne E.Burkey 136

15 The Data Center Manager’s Guide to Networked Imaging Systems Nathan J.Muller 143

16 Collaborative Applications S.Ann Earon 158

17 Supporting Legacy Systems Nancy Blumenstalk Mingus 163

18 Client/Server Architecture and Implementation Nathan J.Muller 168

19 TCP/IP Network Management: A Case Study Vishal Desai 186

20 Trends in Data Communications Services Nathan J.Muller 195

21 The Emerging Advantage of xDSL Technology Andres Llana, Jr 205

22 LAN Printing Techniques Gilbert Held 215

23 Preparing for Cable Modems Gilbert Held 223

24

LAN-WAN Interconnection Requirements and Implementation Considerations

Duane E.Sharp 230

25 Enterprise Deployment: Building an IP PBX Telephony Network John Fiske 242

26 A Quick Overview of LINUX Raj Rajagopal 250

27 Evaluating the Performance of NT-Based Systems Gilbert Held 258

28 Configuring TCP/IP on a Windows NT Workstation Gilbert Held 266

30 Creating GUIs Users Can Use: Usability Analysis Luke Hohmann 286

31 Building GUIs Users Can Use: Usability Development Luke Hohmann 300

32 Reducing the Cost of PC Connectivity Salvatore Salamone 311

33 Evaluating Equipment: A Methodology for Success Gilbert Held 320

34 Understanding the Desktop Management Interface Gilbert Held 328

35 Managing the IT Procurement Process Robert L.Heckman 334

36 An IT Asset Management Toolkit Martin F.Medeiros II 353

37 How to Do Better Deals in Leasing Joe Auer 360

38 Managing the User Interface Ann S.Angel 367

39 Managing End-User Development John Windsor, Leon A.Kappelman, and Carl Stephen Guynes 375

40 Helping Users Help Themselves James A.Larson and Carol L.Larson 382

41 The Consultative Approach to Client Support Kate Nasser 389

42 End-User Computing Control Guidelines Ron Hale 399

43 Reviewing End-User Applications Steven M.Williford 410

SECTION VIII QUALITY CONTROL AND COMPUTER SECURITY 428

44 The Basics of Computer System and Data Network Security C.Warren Axelrod 431

46 Evaluating Platform Reliability and Measuring Its Dollar Value Chris Rooke 452

47 Understanding the Virus Threat Gilbert Held 461

48 E-mail Security and Privacy Stewart S.Miller 471

49 Internet Security and Firewall Policies William Hugh Murray 478

50 Improving Quality With Software Metrics Ian S.Hayes 495

51 Introduction to Data Center Recovery Planning Edward S.Devlin, Cole H.Emerson, and Leo A.Wrobel, Jr 521

52 Developing a Data Center Recovery Plan: Part I Edward S.Devlin, Cole H.Emerson, and Leo A.Wrobel, Jr 531

53 Developing a Data Center Recovery Plan: Part II Edward S.Devlin, Cole H.Emerson, and Leo A.Wrobel, Jr 546

54 Integrating LANs Into the Disaster Recovery Plan Gilbert Held 558

55 The Legal Issues of Disaster Recovery Planning Tari Schreider 565

56 Using Televaulting and Hot and Cold Sites for Disaster Recovery Gilbert Held 571

57 Data Processing and Communications Security During Recovery and Repair C.Warren Axelrod 576

IN TODAY’S CORPORATE ENVIRONMENT, enterprise technology operations extend well beyond the traditional boundaries of the data center to touch virtually every aspect of the organization’s business Nearly every business need is supported in some way by information technology As IT operations professionals, you must be in a position to deploy and support the best IT solutions across a broad range of technologies to effectively contribute to your company’s competitive advantage

To respond to your ever-expanding and growing needs as IT operations professionals,

this year’s edition of the Enterprise Operations Management Handbook has been

expanded to include four new sections:

• Applications Infrastructure and Operations

• Desktop Computing

• Equipment Asset Management

• Customer Support Operations

In these new sections, you will be introduced to the latest technology developments that are shaping the industry Also, this year’s edition of the handbook contains completely new material—no chapters from last year’s edition have been repeated This will provide you with a totally fresh perspective of each area of the handbook

The Applications Infrastructure and Operations section is designed to help IT

managers deal with these challenges by providing methodologies and solutions for integrating new applications into existing, complex, multiple-platform computing processing environments The explosion of new client/server application technology has forced the IT operations manager to be more closely involved with the integration of these systems The IT manager must be capable of analyzing and evaluating the impact of new applications on existing enterprise operations Because more than 70 percent of all major application systems are still running as legacy systems on mainframe platforms, IT managers are presented with critical challenges in how to integrate both internally developed and purchased client/server applications with these systems

Another new topic is Desktop Computing IT operations managers must understand

the users’ desktop configurations in order to effectively provide enterprise-wide computing services to all PCs connected to central computers through local area and wide area networks In addition, IT managers are typically responsible for centrally managing user desktop software configurations through network management tools In this section, you will be introduced to a wide range of desktop computing technology solutions that will help manage this important investment

Also added to this year’s handbook is a section on Equipment Asset Management

IT operations managers are responsible for the acquisition and maintenance of the assets under their control These assets include both IT hardware and software, ranging from PCs and printers to mainframes and large enterprise-wide purchased applications To remain competitive, organizations must acquire and use information technology resources

effectively With the introduction of new decision-support and systems development tools, including prototyping methods, and end users’ growing computer literacy and independence, serious attention must be given to not only receiving financial return on investment, but also to acquiring quality products from multiple vendors who are reliable The responsibility for providing customer support for the use of technology deployed

by the organization’s IT department has grown dramatically over the last ten years Within most organizations, this responsibility is typically placed directly on the shoulders

of IT operations management Customer Support Operations, another new section,

addresses the issues IT managers face in providing end users this valuable service To meet this challenge, IT departments are establishing customer-support help desks; providing liaisons into the organization’s user departments; assisting end users with their development of client/server applications; providing consultation through user-feedback sessions; and delegating access and control of systems directly to end-user groups The IT operations manager must understand the best practices in providing these highly visible and critical services

This year’s edition of the Enterprise Operations Management Handbook also

reinforces the themes introduced in last year’s edition These themes center around the continuing shift of IT services deeper into the day-to-day operations of the enterprise Your ability to manage these IT services has, in turn, become more critical to business success as technology becomes more embedded in the services provided to clients and customers As a result, enterprise IT operations managers must broaden their skills to meet this challenge This includes not only managing the traditional IT infrastructure, but also enabling end users to more effectively use technology to deliver business products and services

As your job continues to change in support of the delivery of critical business services, your skills as IT operations professionals must also change Traditional mainframe and mid-range systems coexist today with LANs (local area networks) and WANs (wide area networks) that connect users’ PCs to each other and to these larger systems Applications systems operate on all these IT platforms and within a complex interconnected environment, all of which you must manage and support In addition, the Internet has introduced new opportunities to increase business growth through direct communication connectivity solutions with vendors, suppliers, and customers IT must develop and support the infrastructure for these complex business connectivity solutions by connecting internal LANs and WANs to the Internet and, in some instances, directly to internal networks of business partners and customers

In this edition of the handbook, we provide a broader range of technology-operations knowledge to help meet the information needs of today’s IT professional The information is presented with a practical orientation so that it can be readily applied to your environment Areas of coverage include:

• IT Management

• Data Center Management

• Application Infrastructure and Operations

• Enterprise Network Management

• Desktop Computing

• Equipment Asset Management

• Customer Support Operations

• Quality Control & Computer Security

• Contingency Planning

Within the sections that existed in last year’s edition, more emphasis has been added to network communications, end-user support operations, computer security, and contingency planning These areas require increasing attention from IT operations personnel The material focuses not only on the technology, but also on methodologies for decision making Knowing how to apply the knowledge in this handbook is critical to your success as an IT operations management professional

ADDRESSING ENTERPRISE BUSINESS SUPPORT

In the area of network communications, the handbook includes the topics which reflect the explosion of new technologies now emerging in the marketplace Networking has always been a vital part of the overall IT operations solution; these emerging technologies provide new opportunities for competitive advantage, delivering high-speed, reliable service in support of network-based applications

The help desk industry is one of the fastest growing areas in the IT operations area today End users are requiring growing levels of support as they become more empowered to deliver technology-based services to customers and to meet the demands

of business partners and vendors The help desk is an extremely important IT investment and must constantly adapt to be responsive to ongoing technology changes, including changes in how technology is used by end users This handbook addresses these issues and provides the IT operations manager with solutions to effectively manage this area

As technology is pushed deeper into mainstream business operations, computer security, quality assurance, and contingency planning become increasingly important Loss or failure of technology service operations can have a disastrous impact on business operations This edition of the handbook, once again, provides important guidance on how the IT operations manager should protect this critical investment IT management should work closely with senior management to properly address these areas within the appropriate business context

THE FUTURE OF ENTERPRISE COMPUTING

As business organizations continue to increase their investment in technology to deliver business products and services more cost-effectively, proper management of the technology infrastructure becomes more critical to the success of the organization Even

as traditional IT operations become more and more automated, new opportunities for IT investment and increasing changes in the IT industry require organizations to react more quickly to remain competitive Business will always be dependent on technology and, as

a result, on someone to effectively manage IT operations As we move into the next century, this handbook will continue to be a valuable source of information to IT operations management, providing important answers to increasingly complex IT issues

Steve Blanding

Houston, TX April, 1999

Section I

IT Management

IT MANAGEMENT MUST CONTINUALLY CONFRONT a wide range of important technology issues You are required to possess multiple skills to meet these diverse and pervasive challenges This section of the handbook provides insight on how management issues are addressed and solved within the IT profession To effectively manage the IT environment, management must be constantly focused on strategic planning, while maintaining communications skills, analytic skills, and budget control

Chapter 1, “Strategic Planning: Business and Technology Issues,” describes the business and technology issues that must be considered when preparing a strategic business plan The plan must be developed in accordance with organizational goals and ever-changing technology needs IT management must continually focus on seeking ways

to more tightly integrate technology with the organization’s overall business plan This chapter relates the barriers and shortcomings most organizations face today in achieving the benefits of effective strategic planning

Another challenge facing IT management today is the effectiveness in negotiation with senior business management for appropriate levels of IT support and services Chapter 2,

“The Corporate Information and Communications Hierarchy: Technological Management in Modern Enterprises,” presents various case studies of how the technology infrastructure can most effectively be positioned within the organization as a result of a threeway negotiation between the CIO, middle management, and senior management The author demonstrates in this chapter how this three-party struggle contributes to the overall effectiveness of the enterprise

Staffing an IT organization with highly technical individuals has been the traditional requirement in mainframe application legacy environments Today, however, IT managers must hire individuals with a blend of technical and interpersonal skills IT personnel are increasingly having to interact with users on more levels than before, due to the dramatic shift toward client/server application environments Chapter 3, “Developing People Skills: A New IT Priority,” addresses the important issue of interpersonal skill development within the IT organization

In some instances, you may need to hire professional consultants to provide the organization with an expert perspective for a particular field of technology Chapter 4,

“Professional Consulting: The Analysis Methodology,” provides a road map to determining the appropriate expectation level when using professional consultants This chapter describes the difficulty in relying on the expertise of someone who is not on the payroll, and is of unknown loyalty to the organization The author describes the process

IT management should pursue to establish a realistic expectation level regarding the

performance and deliverables of consultants Using a case-study approach to illustrate this point, a description of the steps necessary to determine the type of thoroughness and in-depth analysis required when using professional consultants is drawn out

IT management is also responsible for maintaining an efficient, cost-effective technology environment Demonstrating this in a complex network environment is a challenging task Chapter 5, “Pricing Methods Across Linked Networks,” shows you how

to implement a strategy to recover costs across linked networks and how to communicate

to senior management that the data center is more than a service bureau—it can be a profit center, as well

Strategic Planning: Business and Technology

Issues

Layne C.Bradley

IN A RECENT SURVEY CONDUCTED BY A CHANGE MANAGEMENT CONSULTING ORGANIZATION, 1500 chief executive officers indicated their second most-pressing problem was the integration of technology into their companies (Their number-one problem was government regulation.)

The pace of technology development today is far ahead of most organizations’ ability

to implement it effectively There are several reasons for this situation:

• Most organizations today are not structured to realize the true benefits of technology and still cling to rigid management hierarchies that make implementing

organizationwide technologies very difficult There is often too much focus on

departmental issues and goals rather than organizationwide goals

• Even with the rapid growth of computer technology in the past few years, many

workers today are still intimidated by it Whereas they may understand how to do a few basic tasks at the computer—which they are often forced to learn to keep their jobs—they have no real understanding of the technology, how it benefits them and the organization, and how to use it to become even more productive

• Lack of focus, understanding, and senior management support of longterm technology projects often hampers the effective implementation of new technology The cost, both

in time and money, often deters senior management from making the kinds of

investment commitments that are required Also, many senior managers consider computer technology to be a tool only for the organization’s workers rather than for themselves in running the company Consequently, they often delegate

we enter the twenty-first century, however, it is becoming increasingly clear that business and technology are beginning to merge into a single discipline Rather than merely being a part of the business, technology may very well become the business Given the increasing global nature of business, the use of technology may become the only way a company can compete and survive

All of these issues have a direct impact on the data center manager The data center still serves as the focal point of merging technologies Knowing how to manage these technologies from a business perspective may become the single determining factor governing the data center manager’s career success

FACTORS EFFECTING CHANGE

Historically, the data center’s daily operations have been fast-moving, labor-intensive, and highly focused In the early days of business data processing, the data center produced reports for the organization’s functional department in a batch environment The introduction of online systems has made life in the data center more demanding Data centers must now make several hours of online processing available to users and still produce the required batch reports

The data center environment has changed even more dramatically with the introduction of local area networks (LANs), telecommunications, relational databases, and microcomputers The third-party software industry has helped improve the situation

by providing systems that automate a great deal of the manual work Production control and scheduling; tape and disk management; operator responses; network management; and restartrerun operations are routinely automated The logical and technical extension

of this approach is the concept of lights-out or unattended operations—that is, a data center that functions with few, if any personnel, much like the automated automobile factory

The data center, however, is becoming much more than the central point where daily production systems processing is conducted Rather, it is rapidly becoming the hub of technology for the organization it serves The data center manager must become a business person whose skills involve managing technology for business effectiveness rather than merely a technical manager

BUSINESS ISSUES

Industry journals, newspapers, and magazines frequently report on the business of data processing These articles address not only the financial aspects of data centers (e.g., cost centers versus profit centers and return on investment), but also career issues, such as how data center managers can become chief information officers (CIOs) and how CIOs can eventually become chief executive officers (CEOs)

Discussions about the business of data processing have gone on for many years, yet the issue is more relevant today than ever before Because of the introduction of new technology, new management techniques, global competition, and increasing cost pressures, senior management must look closely at MIS’s role in the organization as it seeks ways to tightly integrate these operations into the business

Clearly, data center managers face the challenge of managing the data center as a business, not merely as a cost center In fact, many organizations are actually turning their MIS capabilities and resources into separate businesses by offering services to outside customers Even organizations that continue to provide services only for internal

users are seeking ways to turn MIS into a profit center Efforts to make the MIS department more like a functional line of business have a clear and definite strategic impact on the data center itself If data center managers are to run the data center as a business and more effectively integrate it into the organization, they must keep abreast of several important business issues

The Organization’s Goals

One of the most important, if not critical, changes data center managers must make is in how they are seen in the organization They simply cannot continue to operate, or be perceived as, a purely technical manager Senior management usually does not have the time or the inclination to become highly knowledgeable of technology Therefore, data center managers must invest the effort to become knowledgeable business people who can effectively communicate with senior management on their terms Only in this way can data center managers come to be perceived as an integral part of the organization’s business management and, therefore, able to participate directly in setting the organization’s goals Then, they can set the data center’s goals in harmony with the organization

Becoming a skilled business person may be a challenging task for the data center manager It is no longer optional, however In addition to learning the organization’s specific business, it may be necessary to obtain a great deal of basic business training through seminars, workshops, or enrollment in college courses—perhaps even obtaining

a degree in business The task must be accomplished by whatever means necessary if the data center manager is to become an effective part of the organization’s management team

Businesses become successful because they set and reach goals Goals provide direction, help identify obstacles and opportunities, and allow for the efficient allocation

of available resources The data center must follow this same goal-setting process for its own operations The real key to managing the data center as a business, however, is knowing the organization’s goals and understanding how the data center can help the organization to attain them

Unfortunately, this task is still often quite difficult because a communications gulf exists between senior management and data center management—neither side effectively understands the other side Although this situation is beginning to change, it is a slow process Data center managers must take the lead in bridging this gap by proposing ways for the data center to be included in the organization’s goal-setting process If the data center and its operations are to become a key business function of the organization as well as assume a greater role in using technology to drive the business, this goal-setting process must take place

Expectations for the Data Center

Another major challenge for the data center manager is getting senior managers to define their expectations for the data center Most senior managers do not understand the real role of the data center, and, therefore, their expectations for the data center are far different than the data center manager’s In fact, most data center managers would be

startled by what they would hear if they were to ask their senior managers to define their expectations for the data center No matter how difficult this expectation-defining process

is, however, it must take place so data center managers know what is expected of them and which direction the data center should take Becoming perceived as a business manager and becoming part of the organization’s management team helps this process greatly

Profit Center vs Cost Center

The idea of making the data center a profit center is not new, but it is gaining much more credibility as a real option A cost center recognizes expenses used for conducting operations It usually falls into the overhead category of the corporate budget and its costs are in some way allocated across all user departments A profit center, however, recognizes revenue for its services, as well as expenses, and attempts to show a profit A data center manager can take one of three approaches to accomplish this goal

The first is to accept only internal revenue The data center charges service fees to all the organization’s internal users These fees can be structured in a variety of ways depending on the organization’s goals At times, these fees may be strictly arbitrary, though more organizations are directing their data center to charge true market rates Data center managers are then held responsible for managing data center operations to produce

a profit Many times this approach results in the downsizing and streamlining of data center operations, which allows data center managers to eliminate a great deal of the expenses that limit their center’s profit margin

The second approach is for data center managers to consider providing services to users outside the organization on a contractual basis In this case, the data center, which is usually part of the larger MIS department, becomes a true business This approach is feasible if there is sufficient demand for services and the data center has the processing resources, personnel, and management talent to implement such a business Contracting for business can be a risky proposition, though some organizations have created successful information systems subsidiaries

The third approach combines the first two approaches The data center provides services on a for-profit basis for both internal and outside customers

Outsourcing

Some organizations are selecting outsourcing as an option for their MIS operations Under this arrangement, the organization signs a contract with a third-party vendor to take over responsibility for running the MIS operation Usually, only the actual computer operations are involved, but there have been instances of organizations that have outsourced the management of their network and even their applications development The organization’s employees usually become employees of the third-party vendor This new approach could have a major impact on data center managers In some cases, organizations obtain bids from outsourcing vendors and, at the same time, ask their data center managers to write a bid for providing computer services In other words, data center managers must justify the cost-effectiveness of continuing the operation in-house

This situation is purely a business one—senior management is looking for the best return

on its data processing dollar, and outsourcing must be considered an option

Outsourcing is controversial However, a large number of organizations have pursued

it, with varying results Nonetheless, it is a business issue that data center managers must

be aware of when preparing a strategic plan for the data center

TECHNOLOGY ISSUES

It has been said that the only constant is change, and that observation rings true in the MIS field Since its beginning, MIS has been in a constant state of flux brought about by new hardware and software developments Identifying, planning for, acquiring, and integrating technology is part of the data center manager’s function—and it must be accomplished as costeffectively as possible and perhaps even on a profit basis Although the MIS department has never been afforded free spending, it is being scrutinized as never before by senior management The primary goal today, then, is to decide the best way to use technology so it enhances the organization’s operations, improves its competitive position, and increases its profit margins Gaining greater economic leverage

is, after all, the reason for creating a business-oriented data center

Deciding what technology is appropriate and how best to use it is the real challenge for data center managers Because very few organizations have the financial resources or the need to incorporate all current technology, data center managers must look at what makes sense for their organizations Strategic planning involves recognizing current needs as well as future requirements Identifying the need for more central processing unit power, disk storage, and terminals is clearly part of a strategic plan, but capacity planning alone is not enough

For example, an organization has a centralized manufacturing facility that is served by

a centralized data center In an effort to expand and remain competitive, the organization

is considering creating several smaller manufacturing facilities that will produce the product locally and get it to the market faster Adding more CPU power centrally may not

be the appropriate solution Instead, a distributed network of smaller, fault-tolerant systems may be needed This is a strategic issue because it represents a major change from the current approach and commits the organization to an entirely new long-term direction

This example illustrates how business and technology issues demand that the data center manager be very knowledgeable—not only about the data center’s capabilities and goals, but also about the direction in which the organization itself is heading, and its management philosophies and goals To effectively support the organization’s changed business strategy, data center managers must know the business issues—for example, how the change will affect the organization’s goals and the projected time frame for the change For the organization to be successful, from the technology point of view, data center managers may have to plan for and implement a technology entirely new to the organization Failure to introduce new technology has seriously hurt or even eliminated organizations over the years

Strategic planning in the data center is intended to be a process whereby data center managers can be involved as early as possible in the organization’s long-term goals and

know how current technology relates to those goals and what new technology will be required in the future to make it all happen Some of the information technologies data center managers should consider when developing a strategic plan include:

• Supercomputers, mainframes, minicomputers, microcomputers, workstations, and portable computers

• Artificial intelligence and expert system

• Databases (relational and object oriented)

• Executive information systems

• Voice response systems

THE BUSINESS PLAN

In the language of business today, the strategic plan is more commonly referred to as the business plan Most successful organizations operate from a business plan Depending on the organization’s size and management philosophy, such plans can be very informal or extremely complex and may cover as little as one year or many years To succeed in the long term, an organization must have a directive as to where it is going, how long it will take to get there, and how it must allocate its resources If data centers are to be run as businesses, they must also have such a plan The business plan is where the data center manager combines the business issues and the technology issues discussed in this chapter

There are as many types and formats for business plans as there are businesses Each organization has its own style There are, however, some common elements that all data center managers should include in their business plans:

• A description of the hardware and software configuration

• A description of the network configuration

• Organizational charts and staffing plan

• Budgets

• Milestones and target dates

When preparing the business plan, data center managers must remember that they are not simply preparing a budget for the coming year Rather, they are attempting to present the data center as a business that can be run efficiently and cost effectively Creating a data center business plan is actually a straightforward process that begins by answering the following questions:

• What are the business goals that senior management wants to achieve?

• Are there enough resources to achieve these goals?

• What is the best way to allocate available resources to achieve these goals?

• What are the steps involved?

• What is the projected time frame for the goals to be achieved?

• Who is responsible for this task?

• What are the costs involved?

• What is the projected return on investment?

RECOMMENDED COURSE OF ACTION

Planning of any kind is always difficult when dealing with unknown factors, some of which managers control to only a small degree Long-range or strategic planning is extremely difficult because the longer the planning horizon, the more uncertainty exists Today more than ever, data center managers are required to do long-range business planning for the data center To do this effectively, data center managers must:

• Know the organization’s business thoroughly

• Find out the organization’s business goals

• Know and understand the trends in technology

• Understand what technology would most benefit the organization in reaching its goals

• Know senior management’s specific goals and expectations for the data center

• Develop a business plan that effectively combines business goals and technologies issues

• Become a member of the organization’s business management team

Although change may be constant, it can be managed Making strategic planning for the data center a priority can give data center managers much more control over their environments and goes a long way toward enhancing their careers as they become full partners in the organization’s business plan

The Corporate Information and Communications Hierarchy: Technological

Management in Modern Enterprises

Thomas A.Browdy

TODAY THE TRADITIONAL DP MANAGER, with his or her one-size-fits-all approach, has become almost a relic It is no longer a single technology that needs to be managed for process efficiency gains, but multiple technologies that could be critical for business survival or growth The chief information officer (CIO), or perhaps a team of decentralized Information Systems (IS) directors, has replaced the traditional DP manager and, in some cases, provides a new way for leadership to interact

Telecommunications networks, data exchange, satellites, microwave, LANs, WANs, switches, fiber optics, twisted pair, PBXs, cellular communications, trans-border information automation, and a variety of telecommunications standards and proposed standards have been thrown into a multiplicity of computing environments creating a mixture that requires a whole new management orientation

The new technological management orientation should include ways for planning, assessing, and deploying technology within and across enterprises CIOs or IS leadership teams need to balance technological capability with enterprise capability to become or stay a modern organization that

ENTERPRISE EFFECTIVENESS

Results of this three-party struggle will contribute to the enterprise’s effectiveness If any one role constantly wins, they all lose If top leadership wins the case for controlled stable growth, the next technological paradigm shift will be missed and a competitor

quickly will sweep by (Airline reservation systems were not a part of a stable growth strategy by many now defunct airlines.) Most incumbents in existing markets miss innovation-based paradigm shifts and usually suffer the consequences of losing all or significant pieces of their businesses

If middle-level business management always wins there will be a constant changing of direction and technology learning will be stifled Learning never will be able to reach a maturity level, which could spell the difference between enterprisewide effectiveness and point solutions that seldom contribute to the mission If the CIO always wins there will be

a sophisticated technological infrastructure that no one uses When one of these positions

is weakened by organizational design, private power struggles, or ignorance, then the enterprise becomes less effective and even could threaten survival (Exhibit 2.1) A balanced power struggle is healthy

Managing telecommunication within an enterprise is a formidable task The swirl of technology coupled with the ever-changing business context creates a situation that demands high creativity and sharp intellectual acuity Along with these characteristics the individual manager also is expected to get something done Being creative and smart is just not enough

This chapter presents frameworks that should sharpen one’s intellectual capability about managing telecommunication, but more than that, through usage of five case examples shows how these frameworks can be applied creatively to get something done The frameworks are provided as a way to understand the parameters of effective technological management

Exhibit 2.1 Leadership imbalance results

Exhibit 2.2 Parameters for technological management

These parameters include technology context (high expectations of impact and extreme flexibility), technology relevancy, competitive posture, technological learning, and organizational styles (Exhibit 2.2) The effective technological manager quickly can assess the values these parameters take on and see how they interact to create a unique but understandable technological environment

CASE EXAMPLES

Not all enterprises are created equally This is illustrated by briefly describing five institutions These institutions will be used throughout the chapter to highlight technological and organizational issues

MasterCard International

At MasterCard International a group of potential customers are escorted through the machine room and given a presentation on how networks are managed to ensure fast and efficient processing of information Pride clearly is intoned by the head network administrator as he comments on how often they identify wide area network problems of commercial carriers before the carriers themselves know MasterCard’s expertise about networking has grown since the very beginning of their business The technology used to keep the network functioning in a reliable manner is aging quickly, and there have been various projects to replace the equipment

Movement around the halls is fast and furious People are coming and going to various meetings and conferences Human resources has just posted jobs for all varieties of IS positions, and a new management team tries to create a portfolio of projects that will keep the enterprise up-to-date Some of these projects are large and aggressive Even though similar projects have failed in the past, still there is a penchant to strive for success in large projects Large projects have been international in scope due to purchasing behavioral differences of cardholders between countries Internet initiatives have become

a serious endeavor, but exactly how to handle this new technology is still an open issue The customers for MasterCard are primarily banks, and cardholders are customers of the banks MasterCard International adds value to its customers by supplying various information products, network services, and advertising They are owned and operated by their customers—a group of banking and other financial card-issuing institutions

SMooth Ride Trucking (SMRT)

SMRT, a small- to medium-sized trucking firm nestled in the heart of mid-America, is run by a former driver As tours are given to existing and potential customers, oohs and aahs can be heard in the plush balcony that overlooks a gymnasium-size war room located behind a one-way glass window People, quietly seated behind the glass in the hush of semidarkness, overlook the dispatchers’ war room The war room is a beehive of activity and with its sophisticated information displays, reminds one of the movie “War Games.” The room contains an impressive array of 15 square-foot video-projected images showing summary load distributions, individual truck locations, and weather conditions across North America

The war room is both functional for dispatchers and a marketing device for potential customers Building on the tradition of transporting soda bottles without breakage, this enterprise continues to move all sorts of delicate cargo Specially equipped trailers and attention to driver care for cargo has remained a part of their tradition SMRT handles delicate loads with routes that primarily go north and south to Canada and Mexico For the southern routes trailers usually are dropped off just over the border and drivers from Mexico take the cargo to its final destination After losing equipment through various pilfering schemes, contracts were negotiated with the Mexican trucking firms on penalties for lost goods (including cargo, trailers, and trailer equipment)

One of the competitive edges the enterprise has is accurate and efficient dispatching Trucks across the United States and parts of Mexico and Canada are monitored constantly to make sure few of them are without loads between destinations It is not good business to have empty trailers traveling too far without a load Ideally, for every load that is dropped off the trailer is refilled for a new destination Each dispatcher has earned his or her stripes behind the wheel The owner/president, being a former driver, maintains the rule that dispatchers have to know how drivers are thinking to make the drivers’ jobs efficient

Coupled with dispatcher expertise is a set of medium-sized computers that supports war room activities Drivers are given cellular phones for official and private use Each truck also has a telecommunication device that provides positioning information to dispatchers The sophistication that has provided a competitive advantage now is becoming available to small independent trucking enterprises This company feels

compelled to take on the next network or computing challenge to maintain its market position They hear the competition on their heels

Big Auto Leasing (BIGAL)

From humble beginnings in a small dealership to one of the largest available fleets in the world, BIGAL competes aggressively on renting, selling, and leasing autos It is a privately held company that has experienced exponential growth BIGAL is within the top ten companies who buy and move autos from manufacturing to ownership

Local offices are opened with assistant managers learning their craft by washing autos—it often is heard on the lots that this is a company where “everyone starts from the bottom.” An army of drivers, mostly part-time workers, constantly are moving autos from one location to another—sometimes to fulfill customer demands, sometimes in anticipation of demand (a large convention), and other times to level out the fleet across geographic locations (multiple states could be involved in any of these)

One of the biggest problems they face is knowing vehicle location Each branch office has a significant number of vehicles Operational decisions need to balance an ever-aging fleet (moving out older models) against individual and dealership customers who may want to buy, rent, or lease An individual dealership purchase of a fleet of program cars from BIGAL is a critical part of their business

BIGAL has one of the largest medium-sized computer environments in the world (housing a multitude of medium-sized computers in one location) Their communication technology is primarily satellite-based microwave Using this communication capability each office reports its activities during the day to aid decision making about their multitude of vehicles

Washington University (WU)

While strolling the WU campus, gothic architecture and the appearance of students and professors elicit a vision of great minds at work WU is a private research- and education-based institution of higher learning located in St Louis, MO Freshman students make decisions about attending WU versus other institutions such as Yale, Stanford, Princeton, Cornell, North-western, and Carnegie-Mellon Along with high value comes a high cost However, each of these institutions has endowments that support scholarships for those whose qualifications add quality to each admitted class Students are housed in campus dorms and in various individually leased or rented apartments located nearby

The University includes schools of Arts and Sciences, Engineering and Applied Science, Medicine, Business, Social Work, Law, Fine Arts, and Architecture There is also a first-class library and supporting libraries in most of the schools Departments of Computer Science and Information Management are housed in the Engineering school The University is operated in a decentralized fashion with each school responsible for its own budget, academic viability, and services Some services are provided through central administration including development, physical plant, accounting/finance, human resources, and computing Each school also has its own small version of the central services including computing Schools have their own computing lab environments that may attach to central administration services Some departments even run their own

computer labs The central administration is also responsible for an electronic network and communication including one of the first major Internet sites Dorms and offices are wired for network communications

The dean of the library holds the Chief Information Officer position for the University Administrative systems are very old (most written in the 1970s) and there has been little interest in investing in such systems

Both full- and part-time students make up the University community Part-time students take courses in the evening usually taught by adjunct faculty Distance learning has been discussed, but the strategy is to maintain a classroom environment with classes taught by highly qualified faculty

Amazon.com

This Internet-based business is one of the most popular examples cited for E-commerce The quick and almost immediate success of Amazon has been both exciting to E-commerce entrepreneurs and feared by many traditional businesses Started just a few years ago, this business provides a specialized link between book purchaser and publisher

As Amazon is able to establish partnerships with publishers and book warehouses, they are able to offer a tremendous variety of books from a single source, which can be accessed at any time and almost from anywhere Although they have no actual storage of books, the ability to present a book to a potential customer, along with ancillary services such as reviews and titles of similar books, has created a very powerful business Special services are provided in terms of preference searches, as well as searches by author, topic, and title Links to other services such as chat rooms also are provided

Because of its success and the potential of E-commerce, Amazon has become a known brand name for book stores—even though it has no frontal footage in any mall or along any street It has given “book store” a new meaning One might say its telecommunications environment is its real business, along with adequate compute power

well-to service Internet requests Amazon.com also must pay attention well-to traditional front and back office information systems to carry out its business

Defining Characteristics

Each enterprise possesses a set of defining characteristics including people, business/market, location, size, structure, culture, and technology The combination of these characteristics creates a unique enterprise not to be replicated anywhere It is easy

to forget this principle of uniqueness when common measures such as financial performance, market share, and service performance are used for comparison purposes These comparisons can lead to actions that mimic those taken by another company in an attempt to achieve a similar outcome

But what MasterCard does to be successful will not be the same as SMRT, nor the same as BIGAL, nor the same as WU What is common among

Exhibit 2.3 Telecommunication relevancy grid

enterprises is not as great as what is different Yet, one can speak in generalities about enterprises to understand how to manage them Technology relevance is one of these generalities

TECHNOLOGY RELEVANCY AND COMPETITIVE POSTURE

Network managers are expected to provide key insights on telecommunication technology investment for their enterprises One way to gain insight into telecommunication investment is to consider the current versus future enterprise relevancy of telecommunication technology The importance of telecommunication technology varies according to type of industry, how an individual enterprise competes in that industry, and the impact of industry changes A given level of telecommunication usage may or may not be appropriate for where an enterprise is now The same can be said about the future If future events are envisioned that require additional telecommunication capability, then these kinds of projects need to be considered today Exhibit 2.3 shows a relevancy grid for telecommunication technology Determining where one is positioned on this grid may spell the difference between future success or failure

Industries, in general, may be placed on the relevancy grid This gives one a place to start when considering an individual company (Exhibit 2.4)

Because each enterprise competes in a unique way, blindly assigning an enterprise to a position on the relevancy grid, strictly on the grounds of industry type, may be unwise Traditional market competitive analysis says an enterprise can compete on cost, differentiation, or niche The combination of industry technology relevancy, competitive posture, plus available expertise provides guidance for where a particular enterprise falls

on the grid Exhibit 2.5 depicts where the five case examples fall

The example cases are completely predictable by industry type according to Exhibit 2.5 However, with a little more detail on one of the cases one

Exhibit 2.4 Industry specific telecommunication orientations

can see how it could change positions Suppose it was decided at WU to initiate distance learning and begin recruiting freshmen through the Internet or multimedia and initiate research consortia through electronic sharing of research results that may include nontext-based medical diagnostic documents The ability for multiple researchers at multiple locations to share information quickly is assumed to create the synergy to drive the research toward early conclusions and perhaps more funding

At WU, future telecommunication technology capability will play a key role Hence, the relevancy moves from support to transitioning Relevancy should be coupled with a competitive posture to make clearer what, in particular, needs to be planned Coupling relevance with competitive posture permits one to see what technology may be applicable For example, if WU is a low-cost provider, then telecommunication technology can be used to increase volume If WU is competing by differentiation, then one way to apply technology would be to use the Internet to increase the quality of the freshman class (Exhibit 2.6)

Support relevance suggests there is little need for planning significant changes to the telecommunication infrastructure Sustaining indicates the current level of investment must continue, and the network manager needs to ensure contributions to the business remain visible so they may continue A transitioning enterprise means the network manager will be required to identify projects and gather resources to raise the telecommunications environment to a new plane For strategic, the current investment needs to remain visible, and future investment opportunities need to be identified and planned (Exhibit 2.7)

The big challenge looming before the business world is to be able to choose between learning businesses as they continually evolve, which implies looking for competitive advantage through technology, or responding

Exhibit 2.5 Telecommunication relevancy for case examples

Exhibit 2.6 Telecommunication relevancy for WU

to transmutations of business segments, which implies using technology to create and compete in dynamic markets

Due to globalization of businesses, including production and market implications, and innovative connectivity technologies such as the Internet, markets have become much more dynamic in this decade and will continue well into the next One of the general goals of many companies has been to strive for a competitive advantage using technology Now, since markets have become so dynamic, this goal may need to be replaced with one that utilizes technology to create and participate in dynamic markets

To illustrate this point consider Amazon Books and Encyclopaedia Britannica

With Amazon, what was a very traditional market became much more dynamic with the use of the Internet to sell books One needs only to access Amazon on the Internet at any time from anywhere, use a provided search mechanism, order a book or books, wait a few days, and it/they

Exhibit 2.7 Investment posture by telecommunications relevancy

Telecommunication Relevancy Investment Posture

Support Keep budget

Sustaining Keep attention focused on current contribution

Transitioning Plan new telecommunication portfolio

Strategic Balance between current and future portfolios

arrive at one’s doorstep Responses by Barnes and Noble and others are on the way, bringing their own new added dimensions to selling books This has become a changing market

The ease of customers choosing between companies/products, customers that may visit at any time from almost anywhere, along with integrative services, contributes to this new era of dynamic markets These three characteristics present demands on those who expect to compete First, the new ease that customers have to choose between companies means brand identity of the company will become more important and seen in new ways that open cross-selling approaches (i.e., buying music CDs as well as books at Amazon) Second, customers visiting at any time from almost anywhere means there has

to be a sustainable connectivity and responsiveness capability Third, integrative services means bringing together in one place responses to direct as well as tangential customer needs and interests (e.g., getting a loan from the same place one purchased an auto) Britannica did not consider the three demands of customer ease of choice, potential ubiquitous access, and integrated services resulting in them getting driven from the market by a lower quality product partnered with a personal computer-operating system (e.g., Encarta and Windows) They had brand identity, but failed to understand the interests of customers to look up information with ease and the ability to integrate that information with other things (i.e., use it while writing a term paper) These new demands require a leadership that can think about future possibilities as well as an appropriate technology infrastructure Although there are other considerations in analyzing the negative outcome of Britannica, failure to realize the dynamic nature of their market contributed significantly to a disaster from which they may never recover

OVERALL TECHNOLOGY IMPACT

Modern planning practices have shifted from reducing everything to their lowest level of control toward understanding which containing whole or context the enterprise is a part

of To this end, consider what technology sea an enterprise finds itself afloat on Two important context issues are stability/flexibility of the environment and technological synergistic effects

Regardless of an enterprise’s position on the relevancy grid, almost every enterprise will have to deal with telecommunication technology in some form What has been experienced and will be experienced for some time is the impact of technological component synergy Technological component synergy occurs when mutually dependent,

yet independently developed, technologies come together in a way that creates something new

The DC 3 aircraft is a prime example of commercial aviation Independent development of retractable landing gear, flaps, wing structure, powerful engines, and a desire from the public to travel at faster rates from coast to coast came together in the DC

3 The importance of component interdependencies was not realized until the idea of commercial air travel became a problem someone thought was solvable

The personal computer was also a result of technological component synergy The combination of computer on a chip, display devices, electrical printers, word processing, and eventually spreadsheet software, along with an increasing demand in office environments, led to a computing sea change

Technological component synergy also is driving telecommunication technology Components that are a part of this synergistic effect are fast switches, installed communication links, standards, communications interfaces (e.g., the Navigator browser from Netscape), and an Internet feeding frenzy by the general public Few enterprises will be immune from the effects of this new technological component synergy This means not just understanding where one is now technologically speaking, but where he or she wants to be in the future

The new imperative of modern enterprises is flexibility within constraints of intense competition To become a low-cost producer means acquiring that capability usually through repeated trial and error refinements (continuous process improvement as an example) But to continue to improve the processes that are in place means to entrench the enterprise further into what is now important Enterprise flexibility requires a focus

on the future and could result in changing the way of doing business—the business product(s), the target customers, suppliers, who the workers are, geographic location, etc

To compete by differentiation, flexibility means finding new ways to make product(s) different Flexibility for a niche strategy could mean making or finding a new niche to compete within

Constant exploration of what can be done and creative solutions to problems of force integration coupled with the wisdom of controlled expansion characterize modern organizations The new era of flexibility requires that telecommunication technology be managed to achieve the connectivity necessary to compete and remain agile In fact, the agility of

work-Exhibit 2.8 Learning curve attention

Initiation

Phase II Expansion

Phase III Control

Phase IV Assimilation

Strategic High High High High Transitioning High High High Low Sustaining High High Low Low Supporting High Low Low Low

many enterprises will be their ability to establish a multiplicity of communication modes, although in others it will be a more narrowly focused telecommunication approach

TECHNOLOGY LEARNING

Every significant technology goes through a learning process If one can decide where he

or she fits on a technology learning curve, then actions can be taken to move to a more mature usage of the technology The learning curve has four distinct phases (flex points

on the curve): Phase I is an initial exposure of the technology to a select group; Phase II

is expanded usage with contagious effects within and across enterprises In Phase III there is a recognition that the uncontrolled nature of experiences needs to be controlled so standards for usage are put into place, and Phase IV is widespread assimilation How much attention one pays to enterprise-leaning issues depends upon how relevant the technology is to the enterprise

Exhibit 2.8 relates technology relevancy to effort expended within each phase Phase I needs to be traversed no matter the relevancy position, although high effort for Phase IV

is suggested for only the strategic relevancy condition

Exhibit 2.9 shows how managerial actions differ by what phase of learning an organization is in with respect to telecommunication technology Management’s job will shift as the enterprise becomes more and more aware of how telecommunication technology will affect them There is little doubt that everyone eventually will go through Phases I and II Phases III and IV should be traversed by those who see telecommunication technology as becoming critical for their enterprise

ORGANIZATIONAL STYLE

Where telecommunication technology fits in the enterprise depends on the current organization style and what enterprise contribution telecommunication will have in the future Organizational style may be characterized as organic or mechanistic Mechanistic organizations are command/control centric, hierarchically run, concerned with production efficiency (both service or product), structured planning and control techniques, and monolithic in how projects are approached (not given to an experimental/research orientation) Organic organizations are loosely controlled, group/team-oriented, flat chain

of command, and concerned with intra- and interenterprise boundary spanning

Mechanistic enterprises are very good at continuous process improvement (usually leading to low cost) because they can enact the standards that come with operational efficiencies Telecommunication technology can enable mechanistic organizations to behave in flexible ways contributing to long-term survival Cross-functional networked teams can reach into the heart of an enterprise and provide a new view of what could be done and is being done Such teams have been used to initiate new businesses, to attack immediate problems, as well as to seek out new ways in which a business can reintegrate itself internally among divisions, departments, and staff as well as externally with markets, customers, and other institutions

This is using telecommunication to enable an organic overlay on a mechanistic organization to keep it competitive

Exhibit 2.9 Managerial action examples

users

Connected LANs

Client/server projects

Inter-organizational systems

of intranets

Example:

Knowledge sharing among professionals Information

exploration

projects

Online catalogs with phone numbers and e- mail responses

Integrated supplier/

buyer chain Key

Decisions Initiate a special

environment—both physically and logically Educate small

group Negotiate WAN capability Become a telecomm.-enabled

This may be done with official surveys (not terribly popular with participants), help facilities (resource laden), sponsorship of events depicting the next wave of telecommunication capability during which individuals discover a viable usage for the technology, or initiating projects that may seem risky due to complexity of the technology involved

Projects that use sophisticated technology do not lend themselves to planning, but may

be a necessary organic overlay to sustain a competitive posture Organic overlays for the mechanistic structure of MasterCard are critical moves to keep their telecommunication technology relevant Their overlays include running large projects with fairly loose controls